The latest 13F filing shows that David Tepper, founder of Appaloosa Management and one of the most closely watched hedge fund managers, made sweeping changes to his AI-related stock holdings during the second quarter of 2026. The billionaire exited Sandisk entirely, slashed his Micron stake by 41%, initiated a new position in Broadcom, and purchased put options on Apple — a series of moves that has drawn significant attention across Wall Street.
Appaloosa sold its entire Sandisk position during the quarter. At the end of the first quarter, Sandisk accounted for roughly 3% of the portfolio, valued at approximately $178.7 million based on disclosure data. By the end of June, the stake had disappeared completely. At the same time, Tepper reduced Appaloosa’s Micron holding by 41%. Micron remained the fund’s second-largest disclosed equity position at about 15% of the portfolio, but that was down notably from a peak allocation of 29% in prior periods.
The capital did not leave the AI sector. Instead, Tepper redirected it toward a different layer of AI infrastructure: Broadcom. The filing showed a new position of 150,000 Broadcom shares worth approximately $56.7 million as of June 30. While modest relative to Appaloosa’s largest holdings, the new stake signals a clear shift away from memory chip price cycles and toward custom AI accelerators and high-speed networking architecture.
Tepper also took a bearish position on Apple. The 13F disclosed put options covering 835,000 Apple shares with a notional value of about $242 million, or slightly more than 3% of the portfolio. Apple is a major customer of both Micron and Sandisk, and soaring memory chip prices have been squeezing its gross margin. Apple CEO Tim Cook confirmed on the company’s most recent earnings call that rising memory costs would continue to pressure margins in the coming quarters.
The reasoning behind Tepper’s rotation is revealing. Sandisk’s latest quarterly results were extraordinary: revenue jumped 372% year over year to $8.97 billion, GAAP net income reached $6.9 billion, and gross margin hit 84.6%. The company said roughly two-thirds of sequential revenue growth came from higher prices and one-third from increased volumes. Yet it was precisely this price-driven profitability that appears to have prompted Tepper’s exit. The memory chip market has historically been highly cyclical. High prices encourage capacity expansion, which eventually leads to oversupply and falling prices.
Broadcom represents a different kind of AI investment. The company reported $10.8 billion in AI semiconductor sales for its fiscal second quarter, up 143% year over year, and guided for $16 billion in the following quarter, an increase of more than 200%. Broadcom’s products center on custom AI chips and high-speed networking equipment, with a revenue model that differs markedly from the boom-and-bust pricing cycles of commodity memory.
Tepper has not abandoned AI. Beyond the new Broadcom stake, Appaloosa maintained substantial positions across the AI ecosystem: Amazon was the largest disclosed holding at $1.19 billion, followed by Micron at roughly $1.13 billion, Taiwan Semiconductor at about $788 million, Alphabet at $654 million, Meta at $380 million, and Nvidia at $305 million. The overall direction remains firmly bullish on AI, but the internal structure of the portfolio has shifted significantly.
It is worth remembering that 13F filings are backward-looking. The document reflects holdings as of June 30 and was submitted on August 14. It does not reveal the timing or execution prices of Tepper’s trades, nor whether positions have changed since quarter-end. The value for ordinary investors lies not in copying the trades, but in understanding how a manager who has navigated multiple market cycles is assessing risk and opportunity within AI equities.
With memory chip prices at historic highs and margins near extremes, Tepper chose to lock in gains. As AI infrastructure enters a deeper phase of build-out, he moved closer to custom silicon and networking. That rotation, in itself, sends a clear message.
